On June 1, the Delhi High Court refused to stay the investigation in an FIR against Ashneer Grover, former Managing Director of BharatPe, and his wife Madhuri Jain Grover for alleged misappropriation of funds causing a loss of about Rs 80 crores to the company.
The Delhi Police’s Economic Offences Wing registered the FIR based on BharatPe’s complaint against the former MD and his wife. The duo moved the Delhi High Court seeking quashing of the FIR and a stay of the investigation. However, the court refused to stay the investigation. The court said, “However, no case is made out atleast at this stage for staying the investigation.”
The couple also sought direction that the Investigation Officer must give them an advance written notice if their custody is needed. The court granted them liberty to adopt other remedies available under the Criminal Procedure Code and other laws.
The couple’s counsel informed that, on perusal of the FIR, the allegations pertain to transactions related to Goods and Services Tax (GST) and other matters pertaining to the company’s management and affairs which the couple were entitled to conduct as its directors. Furthermore, the counsel submitted that the couple nurtured the company from a small venture to a valuation of about Rs 20,000 crores. The counsel also claimed that the contents of the FIR does not indicate criminality on the couple’s part.
BharatPe’s counsels argued that the matter involves complex financial transactions undertaken by the couple amounting to defalcations of the company’s funds. Furthermore, the counsels argued that the due availed input tax credits under GST for bogus transactions, wherein the vendors were non-existent and forged documents regarding recruitments made. The counsels also alleged that the duo siphoned off funds from the company.
The court, while refusing to stay the investigation, asked the former MD’s counsel, “These are very complex economic transactions and allegations and counter allegations involving transactions issue etc. How can this form subject matter of quashing? You have to make out an open and shut case where a bare reading of the FIR shows that no offence is made out. Does it sound that kind of an FIR?”
The court rapped the duo’s counsel, stating that just because the company’s board of directors said no fraud occurred does not prevent the FIR from being investigation. The court said, “Assuming that you say once the board of directors said that no fraud was reported by the auditors qua the petitioners but does that prevent the FIR being investigated? Even the board of directors may be involved in certain ways. I don’t know.”
The court, in its strong worded order, said, “All of that is a matter of detailed consideration and the board of directors cannot give you a clean chit and you cannot give a clean chit to yourself. Who else is involved we don’t know. It doesn’t sound like a case where even malice would mean that the matter should be scotched here and now.”
Background
The fin-tech unicorn, BharatPe, has filed a complaint against Ashneer Grover, Madhuri Jain Grover, brother-in-law Deepak Gupta and Madhuri Jain’s family (Shwetank Jain and Suresh Jain). BharatPe has alleged that Ashneer Grover and his family members have caused damages of about Rs 81.3 crores to the company.
It was reported that the unicorn’s complaint was registered u/s 406 (Punishment for criminal breach of trust), 408 (Criminal breach of trust by clerk or servant), 409 (Criminal breach of trust by public servant, or by banker, merchant or agent), 420 (Cheating and dishonestly inducing delivery of property), 467 (Forgery of valuable security, will, etc.), 468 (Forgery for purpose of cheating), 471 (Using as genuine a forged document or electronic record) and 120B (Punishment of Criminal Conspiracy) of the Indian Penal Code.
BharatPe has alleged that the Grover family made illegitimate payments of about Rs 7.6 crores to bogus human resource consultants in collusion with the accused. Furthermore, the accused have made inflated and undue payments through passthrough vendors to the detriment of the company. Furthermore, the company has alleged that there are sham transactions and embezzlement of funds to the tune of Rs 71.76 crores.
The company has also alleged that Madhuri Jain Grover used the company’s funds for personal enrichment and received reimbursements using fake and forged invoices. BharatPe also alleged that she destroyed evidence.
“For the last 15 months, the company has been facing a vicious and malicious campaign run by Grover…The registration of the FIR is a step in the right direction, which unearths various suspicious transactions made by the family for their personal pecuniary gains. This FIR will now enable the law enforcement agencies to investigate deeper into the criminality and bring the culprits to books,” BharatPe said in a statement.
